Too much made of The Economist Intelligence Unit Report

Too much has been made of the recent report by The Economist Intelligence Unit (EIU), which is part of the magazine The Economist.

The Malaysian news agency Bernama spun it to make it appear a forecast of the upcoming general election result. It claimed the EIU predicted the ruling Barisan Nasional (BN) government “will” win the upcoming general election while the Opposition Pakatan Rakyat, for making “costly promises”, appears “a distant second”. It also said the EIU’s conclusion was based on BN’s “successful track record, Prime Minister Najib Abdul Razak’s reform agenda, and his successful economic leadership”. On the other hand, it added, “Pakatan’s populism has remained to be simply hot air”.

Rafizi Ramli, chief of strategy for one of Pakatan’s component parties, PKR, has, however, dismissed Bernama’s spin as being filled with incorrect information. “The report in itself is very neutral,” he said, “but because of Bernama and the way they spin it, it looks like The Economist is giving us a real thrashing.”

It has to be said, after looking at the EIU’s report, that Bernama has indeed coloured its report with subjective interpretation. Nowhere does the EIU state that BN will win the general election. It merely says that BN is “likely” to win, but also that “it will probably fail to attain the two-thirds parliamentary majority that would enable it to make constitutional changes unchallenged”. Neither does the EIU intimate that BN’s likely victory would be due to its “successful” track record and Najib’s “successful” economic leadership. The use of “hot air” is also Bernama’s own editorialising.

In fact, the EIU report actually says that the BN government “has spent lavishly in two consecutive budgets in order to please voters”. And, essentially, it sees the general election as “likely to be a tight race”, and does “not expect the outcome to lead to a dramatic improvement in the public finances”.

What the report really centres on is the likely financial outlook for Malaysia in the aftermath of the general election, hence its title ‘A fiscal bidding war’. Its priority is not really about predicting which side would win.

Even so, a closer analysis of the language the report uses could indicate a slight bias. For instance, it points out that Pakatan “is making many costly promises to the electorate in its eagerness to gain power” but these have “attracted less attention than the generosity” of the BN government. There appears a fair measure of editorialising in the choice of words like “eagerness to gain power”, which throws a negative hue on Pakatan, and “generosity”, which engenders positive connotations for what is really disputable spending on the part of BN.

It also singles out the Pakatan-led Selangor state government for having been accused, mainly by BN, of breaking its promises, having implemented only 15 per cent of its election pledges made in 2008. Why does it pick on the Selangor state government on this particular aspect while it overlooks the positive fiscal achievements accomplished by it and the Penang state government, which is also Pakatan-led?

In any case, the report appears to have been made from an armchair position as it says nothing new that clued-in Malaysians don’t already know about. And for all its professional reputation as a reliable assessor, the EIU is not privy to the country’s hidden accounts and offers no reading of the Malaysian ground sentiment. Its report should therefore be given only a fair amount of serious consideration.